Africa-Press – Botswana. Drug trafficking and obtaining by false pretense are the largest sources of illicit funds in Botswana, The National Risk Assessment (NRA) on Anti-Money Laundering, Counter-Financing of Terrorism, and Counter-Financing of Proliferation (AML/CFT/CFP) has revealed.
Speaking at the Financial Intelligence (FIA) Anti-Money Laundering, Counter Terrorism and Proliferation Financing conference in Tlokweng recently Accountant General, Mr Kealeboga Molelowatladi said tax crimes, motor vehicle theft and poaching were also prevalent in Botswana.
“These predicate offences, threaten the stability and integrity of our financial system and the wider economy,” he said.
In addition, he said such offences posed risks to the country’s socio-economic and if left unchecked, they could allow criminals to benefit from proceeds of crime thus making such offences profitable and attractive.
He added that another disturbing development in the AML/CFT/CPT space was the online scams, which had been growing at an alarming rate in recent years globally.
“Fraudulent websites and spam email targeting individuals, businesses and governments have been the order of the day in recent years,” he said.
He said Botswana had not been spared, with an increasing number of Internet scams reported in the past few years.
He also highlighted that the NRA had rated Internet scams, which were part of obtaining by false pretenses offences as the second largest source of illicit funds in Botswana.
“These developments are a concern to all of us in the anti-money Laundering ecosystem and the wider economy,” he said adding that such trends called for continuous assessment of the effectiveness of controls in dealing with new and emerging anti-money laundering trends.
He further said money laundering was a global concern and the United Nations had estimated the annual global value of proceeds laundered annually to be about US$4 trillion, which was about five per cent of the global Gross Domestic Product (GDP).
However, he said having a robust legal and regulatory framework in line with international standards was one way to build resilient and agile institutions in order to mitigate risks.
Giving a regional and global perspective on drug trafficking and money laundering, the Ambassador of Zambia to Mozambique, Ms Mary Chirwa said data gathered from sources such as United Nations Office on Drugs and Crime (UNODC) painted a grim picture of the scale of the problem. Ms Chirwa said it was estimated that US$32 billion worth of drugs were smuggled across countries annually.
“Drug trafficking poses a major international challenge, affecting millions of lives and requiring global efforts to combat,” she said.
She added that the massive profits from drug trafficking were often laundered with criminals using sophisticated techniques to disguise illegal gains as legitimate funds.
She further said strategic actions were needed to combat money laundering.
“One way was to employ Anti-Money Laundering (AML) methods such as enhanced surveillance in financial institutions for advanced monitoring systems.
These systems are essential for spotting irregular transactions associated with drug trafficking,” she said.
Another way, she said was to use AML screening which assisted financial institutions to screen applicants rigorously while Customer Due Diligence (CDD) measures allowed businesses and financial institutions to authenticate customer identities and evaluate their risk levels.
Further, she said drug trafficking and money laundering were closely intertwined criminal activities that had significant social and economic consequences.
She said by understanding this connection, law enforcement agencies and policy makers could develop effective strategies to disrupt and dismantle drug trafficking networks and prevent the flow of illegal funds.
Explaining the mutual evaluation, Eastern and Southern Africa Anti-Money Laundering Group (ESSAMLG), principal expert, Mr Joseph Jagada said the secretariat had two rounds of mutual evaluations so far.
He said the first round was concluded but had a lot of challenges.
He noted that the current round which was about to conclude also experienced a lot of challenges.
He outlined some major challenges experienced by countries during the current round which included deficiencies in the legal and institutional frameworks on AML/CFT/CFP.
In addition, he said they had discovered that laws enacted and institutional systems had not been effectively implemented by countries. Another challenge experienced was inadequate capacity and skills to implement the laws.
Moreover, at sectoral and national level , he said ,some of the challenges they encountered among others were inadequate understanding of the identified risks in terms of the context of the country.
Additionally they noted, poor prioritisation of risks and allocation of resources and issues of sovereignty and implementation of Financial Action Task Force (FATF) standards.
Generally, he said most countries had not done well with compliance or recommendations of the mutual evaluations. Botswana is currently preparing for the next mutual evaluation in 2027.
FIA had organised the AML/CFT/CFP conference as part of the agency’s 10th anniversary commemoration activities.
The conference provided a platform within which key stakeholders, including policymakers, professionals, experts and the general public, participated in panel discussions on different topics that sought to discuss real Anti-Money Laundering/Counter Financing of Terrorism/Counter Financing of Proliferation affecting the country and made policy recommendations.
The conference was held under the theme; Mitigating Money Laundering, Terrorism Financing and Proliferation Financing Risks: Towards Building Resilient Institutions.
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